ORLANDO, Fla. – Orange County is delaying its plan to use American Rescue Plan funds to pay off medical debt relief after commissioners questioned how recipients would be identified.
On Tuesday, the county commission was supposed to approve the plan to use $4.5 million in ARPA funding and partner with Medical Debt Resolutions, Inc. MDR would work with Orlando Health and AdventHealth to identify debt to buy, going back up to seven years.
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The county’s community and family services department said it believed they could pay off $424 million in medical debt for 154,593 county residents using taxpayer funds.
Commissioners support the plan, but questions arose regarding how the nonprofit would identify the debt to be bought and canceled. The commissioners were concerned that debt that was already in collections would not be identified, and therefore the program would not help residents most affected by medical debt.
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“While rationally it makes sense, because they’re the two providers in our town, but I don’t think those bills and that debt is there, because that’s what they do. They have it, they try to recoup it, and then they sell it. That’s how medical debt works. So the idea of actually helping the individuals would not be finalized here unless there was a solid agreement where these hospitals would agree to bring back that debt and go from there,” said District 3 Commissioner Mayra Uribe.
Commissioners are now asking staff to set up a meeting between the commissioners and MDR officials to get a better explanation of how the medical debt will be identified. There is no timeline for when the meeting will take place.
“I want to make sure our residents see that ultimately those credit reports get some alleviation,” said District 1 Commissioner Nicole Wilson. “If there is a possibility for us to engage with the company or even the medical providers by saying, ‘now explain to us how you clear these off your books and how you’ll get them back’ — I think I’d feel more comfortable.”
If approved, residents being identified for help would need to be low-income and burdened by medical debt, meaning that the debt equals at least 5% of the total household income.
MDR would work directly with the hospitals to identify individuals and then cancel the debt. No one would need to apply.
Other state, county and city governments around the country have used ARPA funds to pay off medical debt for residents, even though they are not expressly authorized to do so. Governments must show that the program is responding to the negative economic impact of COVID-19 by paying off the debt.
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